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Brier Dudley's blog

Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

September 10, 2012 at 9:43 AM

Thoughts on Amazon’s new Kindles: Ads, phones and more

SANTA MONICA, Calif. — Here are six more thoughts on Amazon.com’s Kindle launch — one for every new model the ambitious Seattle tech giant introduced at Thursday’s launch gala inside an airplane hangar here.

Don’t dismiss the rumors of a Kindle smartphone just yet.

It’s still early days for Amazon’s Kindle business, which could release phones and other wireless devices next.

Chief Executive Jeff Bezos dropped a huge clue when he described in detail the new 4G LTE modem Amazon developed for its Kindle devices.

kindwithoffers.jpg

The modem is just 2.2 millimeters — thin enough for a phone — and works with multiple bands of 4G LTE, not just those used by AT&T.

Would Amazon invest in a modem like that and then use it in a single device with a single carrier? I don’t think so, either.

Dave Limp, the vice president in charge of Amazon’s Kindle business, told me the modem will work with other carriers but “we’re starting with AT&T.”

“We had a lot of things going on, so we thought we’d simplify and start first and foremost with AT&T,” he said.

So does that mean the modem also will be used to make a phone? Limp sidestepped my question but didn’t say no.

“If I had a dollar for every different rumor that came out over the last two weeks … ,” he said. “I’m flattered that people are paying attention, but I think the six products we announced today is pretty good. We’re off to a good start.”

Amazon’s new Kindles may challenge the Apple iPad, but Google’s a closer competitor.

Both Google and Amazon are building devices to draw people further into their online services, where the real money and customer connections are made.

The LTE service offered with the upper-end Kindle Fire HD reminds me of the wireless service bundled with Google’s Chrome laptops.

Both Chrome and Kindle devices are built around online services. Connecting has to be cheap and easy to get people to embrace the concept. Google worked with Verizon Wireless to provide Chrome laptop users with 100 megabytes of free wireless access per month for two years, with additional data available for purchase a la carte.

Amazon worked with AT&T to provide 250 megabytes per month — plus 20 gigabytes of online storage — for $50 per year.

It’s not as revolutionary as the free 3G wireless bundled with some Kindle e-readers, but it’s an interesting new wireless option.

For data-hungry users, 250 megabytes seems pitiful. It’s not enough to watch a single high-def movie. But it’s probably fine if you mostly use the device at home or places with free Wi-Fi and want LTE service to occasionally check mail, maps or websites while on the go.

From the Kindle, you can sign up for additional data plans — 3 gigs a month for $30, or 5 gigs for $50. Or AT&T will happily add the device to one of its new shared data plans for customers using multiple devices.

I’ll bet more of these cheap-but-limited cloud-access plans are coming. Perhaps Microsoft will be next, offering access and cloud-storage bundles with Windows 8 systems.

Amazon doesn’t seem too concerned about a nasty patent fight with Apple.

Apple is busy waging war on hardware companies using Google’s Android software. The Kindle Fire line uses Android — version 4.0, heavily modified — but Amazon apparently hasn’t been put on notice.

This is what Limp said when I asked if he expected a patent suit from Apple:

“We don’t comment on unknown things.”

All the new Kindles have ads by default.

Instead of selling versions of the Kindle with and without ads, at different prices, Amazon decided to have all new models display ads by default. Ads can be permanently removed by paying an extra $15 on Fire models or $20 on the black-and-white Kindles.

Amazon’s stance evolved over the weekend. For a time it was going to make ads mandatory on the new Fires, but it decided Saturday to let buyers opt out, for a fee.

Amazon is reaching beyond consumers, aiming the Kindle Fire at business customers, too.

Company executives didn’t push this last week because it could cloud perceptions of the device, but they didn’t deny it’s a priority.

“We’ve got a great new mail application with best-in-class Exchange integration. We have a new calendar application, we have a new contacts application,” said Peter Larsen, vice president of Amazon’s Kindle tablet business.

“We also worked with third parties such as Cisco to make sure that their VPN [virtual private network] client is ready and waiting in our app store. Those are some examples of how we’re making it better for enterprise.”

There actually was a business reason for Amazon unveiling its new Kindles in a hangar at the Santa Monica Airport.

Larsen told a Los Angeles Times reporter that the company wanted to change things up. Previous launches were in New York, the hub of book publishing.

The new tablets “are really about entertainment — movies, apps, games, TV shows,” he said, and L.A. is still the entertainment capital of the world.

That, or somebody at Amazon received a half-price coupon for hangar rental on a Kindle “with offers.”

hangar1.jpg

Here’s Amazon’s video of its Kindle press conference last week:

https://youtube.com/watch?v=VYi1jZXz9Kg?rel=0

Comments | Topics: "with offers", 4G, ads

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